Lefeuvre v. Boekee, 2017 ONSC 6874
The Plaintiff Randy Lefeuvre was seriously injured when he was a pedestrian on the side of the road that was struck by a vehicle. Mr. Lefeuvre started an action against the driver that struck him, along with two Municipalities (Durham and Clarington), the utility Company in charge of the street lights (Miller Maintenance) and a maintenance company in charge of road maintenance (Langley Utilities).
The Municipality of Durham contracted out it’s winter maintenance on many of it’s roads to Miller Maintenance Limited, and the contract provided that Miller Maintenance would include the Municipality as an additional insured on it’s policy, which it did. The Municipality of Clarington (which was part of the Municipality of Durham) contracted out it’s street lighting maintenance to Langley Utilities, and their contract also provided that the Municipality would be an additional insured on the Langley policy.
The Insurers for the two maintenances companies agreed that they owed a duty to defend the municipalities, however the municipalities applied to the Court for an order that they be entitled to hire their own independent solicitors and that they would have control of their own defence.
The Municipalities pointed out to the Court that their coverage under the policies were tied to the negligence of the maintenances companies, and that if the maintenance companies were not found to be negligent, that any damages ordered against the Municipalities would not be covered under the insurance policy. The Municipalities argued that this would create a conflict of interest between them and the insurer, as it would be in the insurers’ best interests if there were no negligence on behalf of the maintenance company.
The Court agreed that in the circumstances there was a conflict of interest that existed between the municipalities and the insurers that were defending them. As a result, the Court granted the order sought, and allowed the Municipalities to appoint their own solicitors and to control their own defences.
You can read Lefeuvre v. Boekee, 2017 ONSC 6874, in its entirety here.